'The strength of the currency': The multinationalization of American business, the balance of payments problem, and United States foreign economic policy in the 1960's.

摘要

This dissertation analyzes the interaction between the United States government and American multinational corporations during the Presidencies of John F. Kennedy (1961-1963) and Lyndon B. Johnson (1963-1969). Specifically, it examines both administrations' efforts to curb foreign direct investment outflow to Western Europe in order to reduce the chronic American balance of payments deficits throughout the decade. Eliminating this deficit was a major component of each Presidents' economic policy. The balance of payments deficit signaled a weak dollar in international currency markets. Both men wanted to correct this situation. The dollar was the principal unit of international exchange in the 1960's. Devaluation, they believed, could cause chaos in the international economy and destroy their own economic initiatives at home such as the New Economics, the Great Society, and the War on Poverty.; Kennedy and Johnson targeted direct investment abroad as a major culprit in the dollar's deteriorating international position. American corporate investment overseas had reached unprecedented heights at the beginning of the decade. The majority of these initiatives existed in Western Europe where American manufacturers of capital intensive products sought to take advantage of rising living standards and the creation of the European Common Market. Both Presidents encouraged these companies to serve this growing market through exports as opposed to manufacturing abroad.; President Kennedy sought to stem the flow of direct investment abroad through an increase of the tax rate for corporate overseas earnings. President Johnson added a new dimension. For most of his presidency, the United States Commerce Department conducted a voluntary program that enticed companies to send less dollars abroad or to fund their direct investment projects using overseas sources. This effort was intimately connected to the Vietnam War. The military engagement exacerbated the balance of payments deficit as the United States government spent billions of dollars fighting communism in Southeast Asia. By 1968, the payments situation had deteriorated to an extent that the voluntary program became mandatory. It was the first formal capital control in the nation's history.